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What were the effects of the First World War on the Indian economy?​

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Answer:

The First World War created a new political and

economic situation in India.

(i) It led to huge increase in defense expenditure,

Custom duties were raised, and income tax was

introduced to finance the war.

(ii) Villagers were called upon to supply soldiers,

forced recruitment in rural areas caused widespread

resentment.

(iii) Prices of essential commodities doubled

between 1913 and 1918 leading to extreme hardship

to the common people.

(iv) In 1918-19, 1920-21 crops failed in many parts

of India resulting in acute food shortage.

(v) Influenza epidemic spread. According to the

census in 1921, 12-13 million people perished due to

famines and epidemics.

Step-by-step explanation:

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